* Property concerns relationships among people w/ respect to things

I - First Possession

1. Theories:

a. “First in Time”: person who was there first gets ownership

b. John Locke’s theory of labor:

i. first in time not enough

ii. When a man moves something out of the state of its nature and has

mixes his labor w/ it, he joins to it something that is his own. It is then

his property

iii. accession: one person adds onto the labor of another

2. May have conflict b/t theories and values (ie: stability or fairness)

A . Acquisition by Discovery

1. Discovery: the sighting or “finding” of unknown or uncharted territory

2. Conquest: taking of possession of enemy territory through force

3. Johnson v. M'Intosh (Native Americans v. Europeans)

a. if a discovery of land is made, and a possession taken, it is taken for the whole

country (ie: for Britain)

b. Native Americans may have the right to occupy land, but not sell it b/c the

land “belongs to the crown”

4. Blackhills Institute v. US (T-Rex fossil)

a. Real property: immovable (ie: land/affixed to land)

b. Personal property: movable

5. Tragedy of the Commons: Each man, pursuing his own best interest in a society that that

believes in the freedom of the commons, leads to a ruin of those commons for all

a. theories to fix problem:

a. privatize

b. gov implementation/restrictions

a. ex: Cattle owner finds it personally beneficial to keep adding more and more cattle, but

all ranch owners think the same thing and eventually, overgrazing will occur

6. Externalities: you benefit from something that affects someone else, but you are not forced to

take into account the costs that go to that other person

a. ex: factory owner does not have to take into account cost of pollution for others (ie:

someone suffering from asthma, etc.)

b. no externality once the effect is taken into account (albeit disregarded)

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7. One's Person

a. Law of Accession

i. when one adds one’s labor to that of another

ii. owner of “principal materials” usually wins.

iii. Sometimes given to person who adds value:

a. Touchstone is if the labor adds a whole lot of value then subsequent

user gets the property.

b. Even then, original owner gets damages for initial value

b. Intentional Intrusions

i. Intrusion:

a. P’s interest in the exclusive possession of his land has been

invaded by the presence of a person or thing upon it w/o P’s

consent

ii. Trespass:

a. D intentionally

i. enters land in the possession of the other

OR

ii. causes a thing or a 3rd person to enter

OR

iii. remains on the land

OR

iv. fails to remove from the land a thing which he is under a

duty to remove

iii. “Entry” may be

a. momentary (ie: walking across land)

b. protracted period (ie: pitching a tent on P’s land)

iv. “Causing a thing or 3rd person”:

a. D, w/o himself entering the land throws, propels, or places a

thing on or beneath the surface of the land, or in the airspace

above it

b. does not have to be thrown directly and immediately upon the

land

c. sufficient if D has knowledge w/ substantial certainty that his

act will result in entry of the thing

iv. D liable even if no harm is caused by his trespass

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v. Right to exclude = one of the most essential “sticks” in the bundle of

property rights

c. Cases:

i. Jacque v. Steenberg Homes, Inc. (delivery path across P’s land)

a. right to exclude one of the most essential sticks in the bundle

of property rights

b. series of intentional trespasses can threaten individual’s

ownership

c. landowners must feel confident that wrongdoers will be

published so they’re less likely to resort to “self-help” remedies

ii. State v. Shack (migrant workers)

a. trespass statute cannot be used to keep out private citizens trying to

furnish medical care or legal services to migrant farmworkers

b. property rights serve human values and are not absolute (ie: cannot be

used to injure the rights of others)

c. private or public necessity may justify entry upon the lands of another

II - Subsequent Possession

1. Common law remedies:

a. Real property:

i. Ejectment: action for possession (similar to replevin)

ii. Trespass: action for damages (similar to trover)

A. Acquisition of Adverse Possession

1. Elements:

a. Actual entry giving exclusive possession

b. Open and notorious

c. Continuous for the statutory period

d. Adverse and under claim of right

2. Entry:

i. NY statue says “occupation”

ii. w/o permission of owner

iii. starts the statute of limitations

iv. exclusive = not shared w/ general public or owner3

3. Open and Notorious:

i. AP must be sufficient to put a reasonably attentive owner on notice

ii. owner does not have to have actual knowledge

iii. reflects sleeping principle: penalize negligent and dormant landowner for

sleeping upon his rights

4. Continuous:

i. does not have to be constant (ie: AP can come and go for errands, etc.)

ii. can come and go in the ordinary course given the nature of the property (ie: summer

beach house in Howard v. Kunto)

iii. use must equal that of an average true owner in the circumstances (such that observers

would regard the occupant as a person exercising exclusive dominion)

5. Adverse and Under Claim of Right:

i. Adverse = “hostile” (asserting against the rights of another owner)

ii. Claim of right = claim of title

a. Acting like a true owner (3 states of mind):

i. Objective: state of mind is irrelevant

ii. Good faith/subjective std.: “I thought I owned it.”

iii. Aggressive Trespasser: “I thought I did not own it, but I

intended to make it mine.”

b. AP = only area actually occupied

c. NOT the same as “color of title”

i. deed or other instrument that grants title, but is erroneous

ii. possession does not need to be continuous

iii. AP = not just part actually occupied, but entire property via

“constructive possession”

iv. constructive possession of the whole will not trump actual

possession of a part by someone else

6. Encroachments:

a. Unintentional: P may have to give up that part of his land

i. P must show he would suffer irreparable harm if removal were denied

ii. Balancing test: hardship to P if removal is denied v. hardship to D if it

is granted

b. Intentional: D must remove the encroachment, regardless of how costly it

would be to him

7. Disabilities:

a. statute of limitations is extended if specified disabilities are present

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b. minority¸unsound mind, imprisoned, etc.

c. immaterial unless it existed at the time when the cause of action accrued

8. Cases:

a. Van Valkenburgh v. Lutz (warring families)

i. land is possessed and occupied only when

a. protected by a substantial inclosure

b. usually cultivated or improved

b. Mannillo v. Gorski (steps/walkway)

i. minor encroachment not evident to the naked eye = not open and

notorious

ii. owner must have actual knowledge of AP in this circumstance

c. Howard v. Kunto (deed/land mismatch)

i. tacking of AP from prior possessor to current possessor is valid if

a. the land was intended to be included in the deed b/t them, but was

mistakenly omitted

b. the two are in privity

III - Nuisance

1. One should use one’s own property in such a way as not to injure the property

of another

2. Nuisance law is elastic and must examine what is fair and reasonable under all the

circumstances (Spur Industries v. Del E. Webb Development)

3. Notes:

i. Nuisance:

a. interferes w/ ordinary uses of land

b. structures built out of spite/malice

ii. No Nuisance:

a. interfereing w/ abnormally sensitive uses of land (ie: drive-in theater

complaining of amusement park lights)

b. aesthetic eye sores (ie: tasteless decoration)

4. Compare: Trespass

a. Trespass = physical invasion of land

b. Nuisance = subj. to inquiries about reasonableness and amount of harm

5. Lateral v. Subjacent Support:

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a. Lateral: support provided to one piece of land by the parcels of land

surrounding it

i. duty to provide support that the subj. parcel would need and receive under

natural conditions

ii. no duty to support structures on the land

iii. generally, strict liability

b. Subjacent: support from underneath (as opposed to the sides)

i. issues arise when one person owns surface rights and another person owns

some kind of subsurface rights, such as a mineral interest

A. Private Nuisance

1. Restatement:

a. D is liable for a private nuisance only if

i. his conduct is a legal cause of an invasion of another's interest in the

private use and enjoyment of land

AND

ii. the invasion is either

a. intentional and unreasonable

OR

b. unintentional result of negligent, reckless, or abnormally

dangerous activity

b. Interference must be substantial (Morgan v. High Penn Oil)

2. Intentional Private Nuisance

a. Intentional:

i. D acts for the purpose of causing the nuisance

OR

ii. knows that it is resulting from his conduct

OR

iii. knows that it is substantially certain to result from his conduct

b. D is liable regardless of degree of care or skill exercised to avoid the injury

3. Unreasonableness:

a. Unreasonable if:

i. Balancing Test (Restatement): gravity of harm outweighs the utility

of D’s conduct

OR

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ii. Alt. Balancing Test (Restatement): harm caused by the conduct is serious and

the financial burden of compensating for this and similar harm to others would

not make the continuation of the conduct not feasible

OR

ii. Threshold Test: focuses on amount of harm to P (ie: did D’s conduct

cross a certain threshold into unreasonableness?)

4. Gravity of Harm factors:

a. extent of the harm involved

b. character of the harm involved

c. social value that the law attaches to the type of use or enjoyment invaded

d. suitability of the particular use or enjoyment invaded to the character of the locality

e. burden on the person harmed of avoiding the harm

5. Utility of Conduct factors:

a. social value that the law attaches to the primary purpose of the conduct

b. suitability of the conduct to the character of the locality

c. impracticability of preventing or avoiding the invasion

6. Unintentional Private Nuisance

a. Much less common

b. D liable only if

i. negligent

ii. reckless

iii. abnormally dangerous activity

c. Looks at P’s harm and D’s level of care

B. Public Nuisance

1. Restatement: unreasonable interference with a right common to the general public

2. Unreasonable:

a. conduct involves a significant interference w/ public health, safety, peace, comfort or

convenience

OR

b. conduct is proscribed by a statute, ordinance or administrative regulation

OR

c. conduct is of a continuing nature or has produced a permanent and long-lasting effect,

and, as the actor knows or has reason to know, has a significant effect upon the public

right

3. Who can sue?7

a. Public agencies (ie: city attorneys or state attorneys general)

b. Private parties

i. who have suffered a harm different from that suffered by other

members of the public

AND

ii. they suffered that harm when exercising a “public right” w/ which D

interfered

iii. (NOTE - doesn’t have to be property)

4. Spur Industries v. Dell Webb

a. Public nuisance dangerous to public health:

i. Any condition or place in populous areas which constitutes a breeding place for

flies, rodents, mosquitoes and other insects capable of carrying and transmitting

disease-causing organisms to any person or persons

b. diff. b/t private and public nuisance often a matter of degree

C. Remedies

1. Nothing (ie: all relief is denied and D is allowed to continue activities)

2. Injunction: enjoin D’s activities

a. where nuisance has been found and damages are substantial

b. Balancing of Equities Test/”comparative injury” (Estancias Dallas Corp. v. Schultz

– air conditioning case)

i. court will consider:

a. injury to D and the public by granting the injunction

AND

b. injury to be sustained by the complainant if the writ be denied

3. Damages: allow D to continue activity but require payment of permanent damages (Boomer v.

Atlantic Cement Co.)

a. for continuing and recurrent nuisance

b. where injury to P is slight compared to the cost of removing the nuisance

c. allows big companies to pay everyone off and licenses a continuing wrong 4. 4.

Purchased Injunction: Enjoin activity but require P to pay D (ie: Spur, where P was responsible

for bringing residential housing – ie: “public” – near D’s cattle farm )

IV - Zoning

A. Legislative land use control (usually city council)

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B. Assumptions behind early zoning:

1. Segregation of Uses is Desirable

2. Central Goal is “Wholesome” (i.e. single-family) Housing

3. Open Space is Important for Healthy Living

4. Effective Regulation Can Protect Against Change

C. Highly local in character (ie: regulation must be considered in connection w/ surrounding area)

D. Must find their justification in some aspect of police power, asserted for the public welfare

E. Euclidean Zoning (Village of Euclid v. Ambler Realty Co.)

1. Use districts

2. Area districts

3. Height districts (a.k.a. “bulk” districts – “floor area ratio”)

F. Devices for flexibility:

1. Variances

2. “Special Exceptions” (in CA “conditional use permit”)

3. Zoning amendments (ie: changes in statute)

H. Aesthetic Regulation (State ex. rel. Stoyanoff v. Berkeley – modern home in traditional area)

1. matter of public welfare (ie: beauty of neighborhood is for the comfort and happiness

of the residents and sustains property value)

2. court will not substitute its opinion for that of the legislative body (ie: architectural

board) unless oppressive, arbitrary, or unreasonable

V - Eminent Domain/Regulatory Takings

A. 5th Amend: Nor shall private property be taken for public use, w/o just compensation

B. Public Use

1. Rule:

a. If no public use then gov can’t take it at all

b. If public use then gov can take, but must compensate the owner

3. Kelo v. City of New London (pink house taken for development space):

a. “public use” = public purpose

b. can transfer from one private owner to another if for future public purpose

c. community redevelopment programs need not be on a piecemeal basis (ie: lot

by lot, bldg. by bldg.)

C. Eminent Domain

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1. Power of government to force transfers of property from owners to itself (ie:

condemnation)

2. Inverse Condemnation: Suit by landowner against gov over whether there has been a

taking and if compensation is due

D. Physical Occupations and Regulatory Takings

1. Measuring and Balancing Rules

a. PA Coal v. Mahon (couldn’t mine coal b/c of house on land)

i. Nuisance? (regulating nuisance is not a taking)

ii. Average Reciprocity of Advantage

a. both parties are receiving some benefit from the regulation

b. if there is ARA, prob. not a taking (inverse not necess. true)

c. ARA can serve as implicit compensation

iii. Extent of Diminution in Value

a. land use regulations almost always pass this test, except total

wipeouts

iv. Conceptual Severance (aka the “denominator problem”)

a. for diminution in value, what is the change in value being compared

to? The whole property? A piece? (ie: if a section of land is taken, do

you say "100% of that section of land is taken" or "1/10 of the WHOLE

property is taken”?)

b. Penn Central Transportation v. City of NY (Grand Central = Historical

landmark)

i. 3 factor balancing test:

a. economic impact (on the claimant, particularly)

i. what is the baseline?

a. future profits not materialized yet?

b. current profits?

b. interference w/ “distinct investment-backed expectations”

c. “character of the governmental action”

i. physical-ish?

ii. ARA?

iii. singling out?

iv. important gov interest?

c. Cases:

i. PA Coal:

a. no public nuisance if only dealing w/ private houses

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b. 3 groups of property rights treated separately:

i. surface

ii. support

iii. minerals

c. dissent: property value ought to be viewed as a whole

2. Categorical Rules

a. Per se taking (Loretto v. Teleprompter Manhattan CATV)

i. Character of governmental action:

a. physical invasion v. use

b. temporary or permanent

ii. Temporary occupation and use restrictions = balancing test

iii. Permanent physical occupation = per say taking

a. No balancing test used

b. Size of the taking is irrelevant (except in determining

compensation)

c. Level of interference irrelevant (ie: substantial or not)

d. 3rd party requirement (ie: fire extinguishers are not per se taking b/c

owner buys, installs, and maintains and they are owner’s property, even

though mandated by the city and outside of owner’s control)

iv. No new legislation or decree w/o compensation

a. Exception (Lucas v. South Carolina Costal Council)

i. proscribed interests were not part of title to begin w/

ii. based on background principles of the State’s law of

property and nuisance already place upon land ownership

i. State must point to these bg principles, not just claim

“nuisance”)

b. How to figure it out:

a. state nuisance law (ie: apply nuisance analysis)

b. Restatement

c. longstanding use by similarly situated property owners

d. allowing others to continue

b. Total Wipeout Rule

i. R: When the owner of real property has been called upon to sacrifice all

economically beneficial uses in the name of a common good

ii. no balancing – a per se rule

c. Cases:

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i. Palazzolo v. RI

a. Diminution in value must be 100% for a total wipeout

c. if P still has value in the property, then Penn Central analysis

applies

c. mere fact that a statute is pre-existing doesn’t make it a bg

principle (ie: in cases of passage of the title)

ii. First English

a. “Temporary taking”: if a gov regulation is found to be a taking and the

gov repeals it, the property owner is entitled to compensation for the time

that the regulation was in effect

iii. Tahoe-Sierra Preservation Council. v. Tahoe Regional Planning

Agency

a. temporary restriction that causes a diminution in value is not a

per say taking (b/c property will recover value once the

restriction is lifted)

E. Exactions

1. Definition:

a. Something required by a permit-granting authority (usually a local gov) in

exchange for a permit

b. Sometimes in the form of land, sometimes in the form of $ (thus, a fee)

2. Essential Nexus test (Nollan v. CA Costal Commission – beach access)

a. the condition substituted for the prohibition must further the end advanced as

its justification, otherwise it’s invalid (ie: permit condition must serve the same

governmental purpose as the development ban)

2. Rough Proportionality Test (Dolan v. City of Tigard – expanding store 2x)

a. fit of the nexus must be a reasonable relationship

b. must be related in both nature and extent

ESTATES:

VI - Possessory Estates

A. Estate:

1. interest which is or may become possessory

2. measured by some period of time (even if indefinitely)

B. Types of Interests:

1. Possessory Interests:

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a. any entitlement that gives one the right to the land at a given moment

b. holder has the right to possess the land now

2. Future Interests: will or might give a person the right to land at some future date

3. Concurrent Interests: Multiple parties have simultaneous rights to possession

C. Wills:

1. Testator/testatrix:

a. person who writes the will

i. devising real property

ii. bequeathing personal property

2. Intestate: someone dies w/o a will

a. Q: whether their issue will receive the property

b. w/o issue, property will escheat to the state

c. heirs

d. per stirpes (by branches – ie: each child gets 1/3)

3. Substitutes for a will:

a. Trust: established by a settlor, who creates a trust that is run by a trustee for the good

of a beneficiary

b. Other options:

i. life insurance (paid out to beneficiaries)

ii. joint checking accounts

iii. pensions

c. Substitutes are useful b/c they don’t have to go through probate (ie: avoid time,

transactions costs, taxes, etc.)

d. Change pretty much automatically

B. Fee Simple

1. Sometimes called “fee simple absolute”

a. “fee” = interest in land

b. “simple” = unlimited duration

c. “absolute” = no future interests

2. Strong bias in the law toward conveying the max amount

3. Mechanics:

a. “To Rose and her heirs”

b. “To Rose”

c. “To Rose in fee simple”

C. Fee Tail

D. Life Estate13

1. “To A for life”

2. Per autre vie (A is granted a life estate and transfers it to B, it lasts for the lifetime of

A only)

3. Reversion: back to original grantor and/or his heirs

4. Remainder: to a 3rd person

5. Numerus Clausus Principle: can’t create a new type of estate (ie: to Sarah and her heirs on

her father’s side)

6. Cases:

1. White v. Brown

a. words and context of a will must clearly evidence intent to convey only a life

estate

b. when ambiguous, a fee simple absolute is assumed

c. if a will is susceptible to two constructions, the construction (if reasonable and

consistent) that disposes of the whole of the estate is preferred

d. attempt on restraint of alienation is declared void b/c inconsistent w/ a fee

simple

i. disabling restraint: withholds from the grantee the power of

transferring his interest

ii. forfeiture restraint: if grantee attempts to transfer his interest, it is

forfeited to another person

iii. promissory restraint: grantee promises not to transfer his interest

2. Woodrick v. Wood (getting rid of barn)

a. Waste: when 2 or more persons have concurrent or consecutive

ownership, one cannot use the property in a manner that unreasonably

interferes w/ the others expectations (designed to avoid uses of

property that fail to maximize the property’s value)

i. affirmative waste: injurious acts that substantially reduce the

value of the property

ii. permissive waste: negligence (ie: failure to take reasonable

care of the property)

iii. ameliorative waste: use that increases the market value of

the land, but is still considered “waste” b/c it changes the

property from its original condition

E. Defeasible Estates

1. Duration of an estate can be cut short by happening of an event (other than the death of

the owner)

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2. 3 Types of Fee Simples:

a. Determinable

i. From O “To A so long as liquor is never served on the premises.”

ii. Durational Words (ie: “so long as”, “while used as”, “until”, “during the time

that”)

iii. Automatically transfers

iv. Grantor has a possibility of reverter

b. Subject to a Condition Subsequent

i. “Fred to Lucy, but if used for non-residential purposes, Fred shall have a right

of entry.”

ii. Conditional words: “but if”, “provided however that when the premises”, “on

condition that the premises”

iii. No automatic transfer

iv. May be cut short IF Grantor elects to exercise right of entry (until then, fee

simple continues)

c. Subject to an Executory Limitation

i. O “to the Hartford School Board, but if it ceases to use the land as a school, to

the City Library.”

ii. creates future interest in 3rd Party

iii. Automatically transfers

3. Notes:

a. Restatement: no categories, only “fee simple defeasible”

b. Different than covenants (ie: “promises”)

i. if broken, damages or injunction are available

c. provision of 1st deceased husband to take away property after wife remarries

i. valid: purpose is to provide support until marriage w/o any desire to

hinder marriage (ie: “to A for life so long as A remains unmarried, then

to B”)

ii. invalid: purpose is to coerce abstention from marriage (ie: “to A for

life, but if A marries, then to B")

d. Mahrenholz v. County Board of School Trustees

i. future interest is not sellable, must be inherited

ii. majority of states allow

a. selling (ie: alienable – sale or gift)

b. devisable (via will)

c. inheritance (to heirs when there is no will)

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VII - Co-ownership and Marital Interests

A. Common Law Concurrent Interests

1. 3 Types:

a. Tenancy in Common:

i. Separate, but undivided interests (ie: each owns an undivided share of

the whole)

ii. Interest is descendible and may be conveyed by deed or will

iii. No survivorship rights (ie: if one tenant dies, no automatic transfer

to the other tenant)

iv. Each must have right to possession of the whole (but after the

doctrine's creation, one can give the other exclusive possession)

b. Joint Tenancy:

i. Tenants own property as single owner (ie: each owns the undivided

whole)

ii. Right of survivorship

iii. 4 unities that are essential:

a. Time: interests must be acquired or vest at the same time

b. Title: all must acquire title by the same instrument of by a

joint AP

c. Interest: all must have equal undivided shares and identical

interests measured by duration

i. if unequal shares, courts are increasingly ignoring the

requirement and divide the proceeds according to the

tenants' intent

d. Possession: Each must have a right to possession of the whole

(but after the doctrine's creation, one can give the other exclusive

possession)

iv. Severance:

a. If one of the unities is later severed, the joint tenancy turns

into a tenancy in common

b. One joint tenant may unilaterally sever the joint tenancy w/o

the use of an intermediary device - ie: a "strawman" (Riddle v.

Harmon)

c. Not severed when one tenant has a mortgage on his interest,

since unity of title has been preserved (Harms v. Sprague)

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vi. Popular b/c it avoids probate since it automatically passes to the

other tenant when the other tenant dies

vii. Creditors:

a. During joint tenant's life: can seize and sell the tenant's interest

in the property, severing the joint tenancy

b. After joint tenant's death: can't seize anything b/c the tenant's

interest has disappeared

c. Mortgage by one tenant does not survive as a lien on the

property after that tenant's death (b/c mortgage is extinguished at

the moment of his death (Harms)

c. Tenancy by the Entirety

i. Only b/t husband and wife

ii. 5 unities:

a. Time: interests must be acquired or vest at the same time

b. Title: all must acquire title by the same instrument of by a

joint AP

c. Interest: all must have equal undivided shares and identical

interests measured by duration

d. Possession: Each must have a right to possession of the whole

(but after the doctrine's creation, one can give the other exclusive

possession)

e. Unity of Marriage

iii. If one of the unities is severed (ie: divorce), the tenancy turns

into tenants in common (absent some agreement to the contrary)

iv. One person cannot unilaterally sever the tenancy (action by both is

required)

2. Notes:

a. If conveyance is vague, presumed to be a tenancy in common

b. If vague and married, presumed to be a tenancy by the entirety

c. If tenants die at the same time:

i. in the absence of other instructions (via will, etc.)

ii. 1/2 and 1/2 approach used (ie: 1/2 goes to A and 1/2 goes to B)

iii. unless clear and convincing evidence that one survived the other by at

least 120 hrs.

d. If A murders B, A loses his right of survivorship in the decedent's share

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B. Relations Among Concurrent Owners

1. Delfino v. Vealancis

a. Partition as a means of resolving disputes

b. Partition in-kind: physical division of the land according to the parties’

respective interests

i. presumption favors this type

c. Partition by sale: forced sale of property and division of the profits among the

concurrent owners

i. Should only be ordered

a. When physical attributes make in-kind impracticable or

inequitable (ie: oddly shaped land)

AND

b. Owners’ interests would be better promoted by partition by

sale (ie: numerous fractional owners)

2. Spiller v. Mackereth

a. Tenants-in-common have an equal right to occupy

b. To owe rent, the one in actual possession must have

i. denied to the other the right to enter (ie: an ouster)

OR

ii. agreed to pay rent

c. Ouster (2 meanings)

i. beginning of the running of the statute of limitations for AP

a. established when the occupying cotenant asserts complete

ownership and denies the co-tenancy relationship (ie: hunting the

land, cutting timber, paying taxes, renting part of the land, etc.)

ii. liability of an occupying cotenant for rent to other cotenants

a. claim of absolute ownership not an essential element

b. refuses to allow other co-tenants to use and enjoy the land

3. Swartzbaugh v. Sampson

a. where 1 tenant leases common property to a 3rd party, the other tenants-in-

common cannot cancel the lease or recover exclusive possession of the entire

property

i. He can only recover the right to for joint possession

ii. He cannot eject his co-tenant in possession

c. 1 joint tenant in possession of personal property may pledge his interest in the

property to another

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i. pledgee's rights are valid to the extent of the pledgor's interest

ii. each joint tenant has an equal right of possession and so the pledgee

has the same right of possession that the pledgor had

C. Marital Interests

1. 2 diff. systems of marital property:

a. Common law (English system)

b. Community Property (Continental system)

1. Common Law

a. H and W have separate prop.

b. Ownership is given to the spouse that acquires the prop.

c. Early Common Law:

i. Historically, at moment of marriage W “ceased to be a legal person for the

duration of the marriage.”

ii. H and W were regarded as one (ie: as the husband)

a. W under H’s “cover” (ie: protection during marriage)

b. Included tort liability

iii. W’s personal property became H’s

iv. H had right to:

a. Possess W’s real property

b. Alienate right to possess

c. Reachable by creditors

d. Married Women’s Property Acts (MWPA):

i. Protected W’s property from H’s creditors

ii. Granted W autonomy (although not full equality)

iii. W’s property became her separate property

a. Immune from H’s debts

b. W gained control of her own earnings

e. Swanda v. Endo (HI car accident)

i. R: TBE estate is not reachable by creditors of 1 spouse

ii. TBE rights in light of MWPA (4 approaches)

a. Group 1:

i. unaffected by MWPA (ie: kept historical version of common law)

ii. H has exclusive dominion and control of possession and profits

iii. H can convey prop. to another, subject only to W’s right of

survivorship

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a. can convey but only in regards to HIS right of survivorship

(ie: H cannot sell/give away W’s right of survivorship)

iv. Differences re: creditors (ie: in MA only, creditors can reach H’s

share)

b. Group 2:

i. estate may be sold or levied upon for either spouse’s separate

debts

a. subject only to other spouse’s right of survivorship

ii. creditor gains right to possession of the prop.

iii. only thing creditor can’t touch is the non-debtor spouse’s

right to survivorship

iv. creditor is betting on the non-debtor spouse dying first, so

that the creditor can collect on the debtor spouse’s right of

survivorship

c. Group 3:

i. Attempted conveyance by either spouse is void (ie:

conveyance only allowed if BOTH spouses convey)

ii. estate cannot be subj. to the separate debts of 1 spouse only

iii. HI picks this one b/c:

1. Nature of the estate:

a. indivisibility of the estate,

except by joint action of the

spouses, is an indispensable

feature of TBE

b. Inability of 1 spouse to alienate

his interest

i. No separate interests

ii. No option of partition

2. Policy reasons:

a. Family solidarity (ie: interests

of the family unit favored over

creditors’ interests)

b. Shortage of fee simple

residential prop.

d. Group 4:

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i. Only right of survivorship of either spouse is alienable and

attachable by creditors

ii. Use and profits cannot be alienated during marriage (ie:

creditor cannot gain right to possession)

* Main take-away: TBE can be broken down diff. ways

f. TBE Exceptions:

i. IRS

ii. Fed. forfeiture law:

a. upon proof that prop. is used in an illegal drug transaction, the prop. is

forfeited

b. only D’s interest is forfeited – not an innocent cotenant’s interest

c. acts as a severance and becomes TIC

d. TBE:

i. US v. 1500 Lincoln Ave: only forfeitable interest is D’s

survivorship interest

ii. US v. Lee: home had not been used for D’s criminal activity,

t/f the gov. was denied a forfeiture judgment

iii. Many states recognizing TBE allow it in personal, as well as real property

2. Termination of Marriage

a. Divorce:

i. Early Common Law:

a. Placed great emphasis on the way title was held (ie: property given to

spouse holding title)

b. TBE prop. TIC

c. Only could divorce if extreme cruelty or adultery

d. W usually entitled to continuation of support (ie: alimony)

i. Could be denied if wife was at fault

ii. Modern approach:

a. Common law replaced w/ rule of equitable distrib. (ie: judge divides

according to equitable principles – proportional share)

i. current movement toward equal distrib.

b. Division:

i. Many divide all prop. owned by spouses, regardless of time

and manner of acquisition

ii. Others, only “marital property”

a. Reflects principle of community property

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b. Some, only prop. acquired from earnings

c. Some, include all (ie: gifts, inheritances, etc.)

c. “Fault”

i. “No-fault” divorce

ii. Some still take into account, others ignore it

d. Alimony:

i. “Rehabilitative alimony”: for limited period of time until

spouse can enter job market and become self-sufficient

e. Compensatory spousal payments [Principles of the Law of

Family Dissolution (AIL)] if:

a. Loss of high living std. for marriage of significant

duration

b. Loss of earning capacity due to caring for

children

c. Loss of earning capacity b/c caring for sick, elderly, or

disabled 3rd party due to fulfilling joint obligation

d. Divorce before realizing a fair return from investment

in the other spouse’s earning capacity

e. Unfairly disproportionate disparity b/t spouses in their

respective abilities to recover pre-marital living std. after

short marriage

iii. Professional degrees (3 major approaches):

a. Graham (CO) – not property

i. Property = everything w/ an exchangeable value or which

makes up wealth or estate

ii. Degree has no exchange value or objective transferable value,

is personal, terminates on death, is not inheritable, and can be

acquired solely via money

b. Mahoney (NJ) – reimbursement alimony

i. reimbursement for all financial contrib. towards former-

spouse’s education

c. O’Brien/Elkus (NY) – marital property

i. Reimbursement does not take appreciation into consid.

ii. Marriage = economic partnership

iii. Property does not have to = asset w/ exchange value, be

assignable, or be transferable

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a. Prop. may be tangible or intangible

b. Interest in career may be represented by direct

(financial) or indirect (taking care of kids) contrib.

iv. Nature and extent of contrib., rather than nature of career,

should determine status of enterprise as marital prop.

b. Death:

i. Early Common Law:

a. Land stayed in family, but surviving spouses supported for their

lives

b. Personal prop:

i. Widow:

a. 1/3 if surviving issue

b. 1/2 if no surviving issue

ii. Widower: took all W’s personal prop.

c. Dower: given to a surviving W to help support her after H dies

i. Life estate in 1/3 of land during marriage

a. Qualifying land:

i. freehold land which H seized during

marriage

ii. inheritable by the issue of H and W

iii. fee simple (H is sole owner – W’s interest

doesn’t count) or TIC during marriage

ii. Attaches to land at the moment of marriage (includes prop.

acquired throughout the marriage)

iii. If W dies before H, or they divorce, W’s inchoate dower is

extinguished

iv. After inchoate attached, H is powerless to defeat it

v. Both H and W must sign deed to land to release dower, even

though title is only in one of them (ie: for creditor or purchaser

or land)

a. Only relevant remaining part in modern dower

i. exists in only 4 states

ii. Modern Elective Share:

a. Surviving spouse has elective share (ie: ownership share) in all prop.

i. Real and personal

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ii. Can renounce will and elect to take a statutory share, which is

usually larger (usually 1/3-1/2)

iii. Does not apply to:

a. prop. held by decedent and another in JT

b. life insurance proceeds

b. Attaches at moment of marriage

c. Form of deferred community prop. (here, does not receive prop.

interest during marriage, but at spouse’s death)

d. Applies to all decedent’s property AT death

e. T/f can be defeated by gifts BEFORE death

i. May be set aside if just for purpose of defeating elective

share

3. Community Property

a. Separate v. Community:

i. Separate:

a. acquired pre-marriage

b. acquired during marriage via gift, devise, or descent

c. some states: income from separate prop. = separate prop.

ii. Community:

a. earnings of each spouse are owned equally as undivided shares during

marriage (ie: rents, profits, fruits of earnings)

iii. Must look at:

a. Time acquired (ie: pre-marriage, during marriage, post-

divorce)

b. How acquired (ie: gifts, inheritance, work earnings)

b. Community Property Characteristics:

i. Marriage as a partnership

a. Prop. acquired during marriage is strongly presumed to be CP

i. overcome only by preponderance of the evidence

ii. burden is on spouse trying to assert that it is separate prop.

ii. No:

a. dower, curtesy or TBE

b. partition

c. survivorship rights (ie: When H dies, his ½ does not automatically go

to W)

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i. H can devise his ½ to another party

ii. Many states: if intestate, decedent’s share goes to surviving

spouse

iii. Some states: spouses can create new form of commun. prop.

w/ a right of survivorship

d. taking community prop. and turning it into s/t else w/o both signing

off/agreeing (ie: take earnings and buy a JT prop. needs transmuting)

iii. Transmuting:

a. Changing the type of prop. from commun. into separate, or vice versa

i. signatures/agreement of BOTH spouses is necessary

b. Most states require writing, although signature on a deed often

presumed to be valid

c. However, one spouse acting alone can transmute separate prop. into

CP by making a “gift” to the community

iv. Business that started pre-marriage and grows in value during marriage may be

treated as CP depending upon whether the growth was due to the non-owning

spouse’s effort or just normal appreciation

v. At death, entire community prop. receives a “stepped-up” tax basis for fed.

income tax purposes (ie: when selling house value is deemed the value at

spouse’s death, not the value when first bought. Therefore, if selling at a profit,

taxed less)

c. Issues:

i. Management:

a. H and W have equal management powers

i. Exception: title is in the name of only 1 spouse, then only that

spouse may be able to manage prop.

b. Manager acts as fiduciary

i. must act in good faith (ie: cannot act behind the other spouse’s

back)

ii. good judgment is NOT required

c. Selling:

i. Manager can sell commun. personal prop.

ii. if joinder is not required, manager can sell commun. real

prop.

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d. Creditors of a managing spouse can reach whatever commun. prop.

he is legally entitled to manage

ii. Mixing commun. prop. w/ separate prop. (ie: starting to make payments pre-

marriage, and fully paying off prop. during marriage)

a. Inception of right: character of prop. determined at time spouse

signed K of purchase

i. Community entitled only to a return of commun. payments

plus interest

ii. Community is NOT entitled to a return on appreciated value

a. appreciation, plus the orig. $ paid from separate funds

pre-marriage goes to the owner spouse

b. Time of vesting: title does not pass to spouse until all the installments

are paid

i. when the title is taken is what is important

c. Pro rata apportionment: commun. payments “buy in” a pro rata

share of title

iii. Migrating couples:

a. Prop. characterized under commun. prop. or common law based upon

domicile of the spouses when the prop. is acquired

b. Generally, once initially characterized, the ownership does not change

when the parties change domicile (ie: when a couple moves to a state w/

a diff. system, the orig. system the prop. was acquired under it usually

recognized)

i. EX: moving from common law commun. prop. state:

a. commun. prop. state will still recognize common law

designation of separate prop. acquired in previous state

b. however, this means there is no longer elective share

(b/c now in commun. prop. state)

c. But, title remains the same (ie: separate prop.)

d. T/f when H dies, if all is his separate prop., W is

screwed unless H devises some to her

ii. Some common law states: Uniform Disposition of Commun.

Prop. Rights at Death Act:

a. real prop. located in enacting state, purchased w/ or

traceable to proceeds or income from commun. prop.

will be treated as commun. prop. on death

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c. Exception:

i. both parties consent to the change in ownership

ii. quasi-commun. prop. (CA)

a. At death, or divorce, CA will recharacterize personal

prop. that has not been earned in commun. prop. state to

commun. prop.

VIII – Future Interests

1. Give legal rights to interest owner:

a. Can sell or give away remainder

b. Can enjoin another from committing waste

c. Can sue 3rd parties who injure the land

d. Some state statutes do not allow contingents to sue for waste, partition, or for a trust

accounting

e. Presently existing property interest

2. Remainders:

a. Future interest that waits politely until the termination of the preceding possessory

estate

b. Capable of becoming possessory at the termination of the prior estate

c. Not required that future interest be certain of future possession, only that it be

possible

d. If ambiguous, law has preference for vested remainder

3. Future interests recognized:

a. Transferor

i. Reversion

a. Interest remaining in the grantor, or in his successor, who transfers a

vested estate of a lesser amount than that of the vested estate which he

has

b. Hierarchy of estates determines what is a “lesser estate” (ie: fee

simple fee tail life estate leasehold estate)

c. Transferable during life, and descendible and devisable at death

d. All reversions are retained interests, which remain vested in the

transferor

e. May or may not be certain to become possessory in the future (but

name “reversion” is the same for both)27

f. Ex: O says: “to A for life”, land reverts back to O at A’s death, or to

O’s heirs, certain to become possessory

g. Ex: O says “To A for life, then to B and her heirs if B survives A”,

land reverts back to O at A’s death, or to O’s heirs

i. Not certain to become possessory

ii. NOT called a “possibility of reversion”

ii. Possibility of reverter

a. When an owner carves out of his estate a determinable estate of the

same quantum

b. Almost always, carving fee simple determinable out of a fee simple

absolute

c. T/f, usually it’s a future interest remaining in the transferor or his heirs

when a fee simple determinable is created

d. Discussed w/ fee simple determinable

e. Ex: O conveys estate “to School Board so long as used for school

purposes”

i. O has possibility of reverter

ii. Automatically is terminated

iii. Right of entry (aka power of termination)

a. Owner transfers estate subject to condition subsequent

b. Retains power to cut short or terminate the estate (does not happen

automatically, owner must exercise right of entry)

c. Discussed w/ fee simple subj. to condition subsequent

d. Ex: O conveys estate “to School Board, but if it ceases to use the land

for school purposes, O has right to re-enter and retake premises”

c. Transferee

i. Vested remainder

a. Elements:

i. Given to an ascertained person

AND

ii. Not subject to a condition precedent (other than natural

termination of the preceding estates)

iii. Ready to become possessory whenever and however all

preceding estates expire

b. Types:

i. Indefeasibly/absolutely vested 28

a. Certain of becoming possessory

b. Cannot be divested

c. Ex: O conveys “To A for life, then to B and her heirs”

d. Ex: “To A for life, then to B”

ii. Vested remainder subj. to complete divestment (aka vested

subj. to complete defeasance)

a. Uncertain of becoming possessory

b. Subject to being divested if an event happens (ie:

subj. to cond. subsequent – it vests and then there is a

cond. that can take it away)

c. Fine distinction b/t this and contingent remainder

d. Usually hinders on a comma

e. Here (unlike in conting. remaind.) could get the estate,

but if event happens, then you could be completely

divested (ie: lose the prop.)

f. Conting. Remainder is subj. to condition precedent

g. Must classify interests in sequence as they are written

h. If conditional element is incorporated into the

description of the remainderman, then contingent

i. If after words giving a vested interest, a clause is

added divesting it, then remainder is vested

j. Ex: O conveys “To A for life, then to B and her heirs,

but if B does not survive A to C and his heirs”

iii. Vested subj. to open (aka vested subj. to partial divestment)

a. Remainder created in a class of persons (ie: A’s

children)

b. Vested if

i. One member of the class is ascertained

AND

ii. No condition precedent

c. Ex: O conveys “To A for life, then to A’s children and

their heirs”

c. Contingent interests may ripen into vested interests, w/o possession

taking place

i. EX: “To A for life, then to B if B graduates.”

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a. At time of conveyance, B has a contingent

remainder.

b. Once B graduates, she has a vested remainder (ie: no

longer contingent b/c she has fulfilled the cond.

precedent)

c. Interests vests when B graduates, but becomes

possessory when A dies (which could be after B

graduates)

ii. Contingent remainder

a. Elements:

i. Given to an unascertained person

OR

ii. Contingent upon some event occurring other than the natural

termination of the preceding estates (ie: subject to a condition

precedent – something has to happen before it vests)

b. Does not get estate UNTIL cond. is satisfied

c. Ex (unascertained): “To A for life, then to the heirs of B” (b/c heirs

are unknown until B’s death)

d. Ex (contingent): “To A for life, then to B and her heirs if B survives

A”

i. Similar in lang. to vested subj. to complete divestment, but w/o

comma – which makes all the diff.

e. Ex (alternative contingent remainders): “To A for life, then to B and

her heirs if B survives A, and if B does not survive A to C and his heirs”

iii. Executory interest

a. Types:

i. Shifting: Divest or cut short some interest in another

transferee

OR

ii. Springing: Divest the transferor in the future

b. Legal effect of both are the same

c. Old days: no shifting/springing interests (“Use” was created to

circumvent)

d. When stated event occurs, automatically divested by an executory

interest in a transferee

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e. Ordinarily treated as contingent interests, b/c they are subj. to a cond.

precedent and do not vest until they become possessory

f. Can be created in possession or in remainder

g. EX (possessory): “To A and his heirs, but if A dies w/o issue surviving

him, to B and her heirs”

i. A has possessory fee simple subj. to exec. limitation

h. EX (remainder): “To A for life, then to B and her heirs, but if B dies

under the age of 21, to C and her heirs”

i. B has a vested remainder in fee simple subj. to exec. limitation

4. Four historic diff. b/t vested and contingent remainders:

a. Vested accelerated into possession, contingent cannot become possessory as long as it

remains contingent

b. Early common law: contingent was not assignable during remainderman’s life and was

unreachable by creditors (b/c possibility of interest, not actual interest).

i. Now: transferable during lifetime and reachable by creditors

ii. Vested always transferable during life as well as at death

c. Contingents were destroyed if they did not vest upon termination of the preceding life

estate

d. Contingent subj. to Rule Against Perpetuities

5. Restatement 3rd proposals:

a. No division of future interests, just called “future interests”

i. All are alienable, devisable, and descendible if owner’s death does not cause

the interest’s termination

ii. Exception: subj. to valid restraint on alienation

b. Only “vested” and “contingent” categories (ie: no “indefeasibly vested”, etc.)

i. Contingent: if for any reason it might not take effect in possession or

enjoyment

ii. Either vested or contingent can be subject to open

c. Class gifts:

i. Interest of each member existing from time to time is subj. to open

ii. Interests of potential class members are always contingent

A. Rule Against Perpetuities

1. Gray Formulation:

a. No interest is good unless it must vest, if at all, no later than 21 yrs. after the death of

some life in being at the creation of the interest

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i. Strikes down contingent interests that might vest too remotely

b. Purpose is to avoid excessive control by the “dead hand” of the past

i. Heads of families were concerned about securing family land from incompetent

children

c. Practice questions: Lecture #4, slides 8- 9, 11, 20-24

2. Steps for applying RAP:

(1) Determine the type of future interests and when created

a. Type:

i. Applies only to interests that are not vested at the time of the

conveyance that creates them:

a. Executory interests

b. Contingent remainders

c. Vested remainders subj. to open

ii. Does NOT apply to any future interests retained by the orig. grantor

(ie: reversions, possibilities of reverter, and rights of entry)

c. When:

i. At time of conveyance

OR

ii. If a will, at time of testator’s death

(2) Find the “lives in being”

a. Key: to be a validating life, a person must be someone who can affect vesting

or termination of the interest

i. Most times found among persons whose lives are somehow casually

connected w/ the vesting or termination of the interest (ie: preceding life

tenant, taker of contingent interest, person who can affect events related

to a cond. precedent, one who can affect the identity of the takers – A in

gift to A’s children)

b. If there is no person by whom the requisite proof can be made, the interest

is void unless it must vest or fail w/i 21 yrs.

(3) Ask: Is there any chance that the interest could vest or fail to vest outside of 21 yrs. of

the death of those alive at the time of creation of the future interest?

a. Must examine all possibilities – no matter how unlikely

b. If there is a chance that the interest could violate RAP, then cross out

offending lang., and whatever interest is left (ie: life estate or reversion) remains

valid and enforceable

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i. EX: O conveys Blackacre “to A for life, then to A’s first child to reach

25.” (A has no children)

a. A has a life estate, A’s child has a contingent remainder subj.

to RAP

b. Lives in being? A.

c. Is the remainder certain to vest w/i 21 yrs. after A dies? It

might, but it might not. So the interest violates RAP.

d. Remedy: “To A for life, then to A’s first child to reach 25.”

c. Perpetuities saving clause:

i. Designed to terminate the trust, and distrib. the assets, at the expiration

of specified measuring lives plus 21 yrs., if the trust has not earlier

terminated

ii. May use extraneous lives in a saving clause (ie: might end the trust 21

yrs. after the death of the survivors of the descendants of Rockefeller

living at the creation of the trust)

3. Violations:

a. Hints: look for words that describe potentially unascertained people (ie: children,

grandchildren, spouse, widow, issue, heirs)

i. Do these create a possibility that someone could be born after the conveyance

that would affect the vesting?

b. Tricky issues:

i. “Fertile octogenarian”

a. Presumption of lifelong fertility (ie: presumes children and the

elderly can conceive and give birth)

b. Presumption is conclusive and will not yield to contrary evid.

c. EX: “In trust for the life of A, then to A’s children for the life of the

survivor of them, then upon the death of the last surviving child of A, to

A’s grandchildren.” (At the time of T’s death, A is an 80 y/o woman w/ 2

living children, B and C)

i. A has a life estsate (equitable), A’s children B and C have

conting. remainders (subj. to open), A’s grandchildren have a

conting. remainder

ii. Lives in being at the time of the grant: A, B, C

iii. Will the remainder to the grandchildren definitely vest of fail

w/i one of their lives plus 21 yrs.? Possibly not if A has a child

33

born after T dies, an “afterborn child.” This child is not a life in

being at the time of the grant

ii. Class gifts – max of 1 Q

a. All or nothing rule: if gift to any member of the class might vest too

remotely, the whole class gift is void

b. Gift is not vested in any member of the class until the interests of all

members have vested

i. For a gift to be vested:

a. Class must be closed (ie: each and every member of

the class must be in existence and identified)

AND

b. All conditions precedent for each and every member

of the class must be satisfied w/i the perpetuities period

c. Rule of convenience (ie: class closing rule):

i. May save the interest

ii. Rule cuts off the possibility of new entrants to a class (ie:

“closes” the class) at the earlier of two times:

a. Natural physiological end (ie: when the possibility of

births or adoptions ends – for ex. by the death of a class’

ancestor)

OR

b. Premature or artificial closing (ie: on distrib. date if a

beneficiary of the class gift is then entitled to distrib.)

iii. This is a rule of construction (not law) so it yields to evid. of

a contrary intent

iv. EX: “To A for the life of B, then to the members of the SIR

(Students in Robinson) club.”

a. A has life estate pur autre vie. Members of SIR club

have a vested remainder subj. to open (ie: b/c more

students could come in)

iii. The “unborn widow”

4. Reforms:

i. Focusing on actual rather than possible facts existing

ii. Designed to avoid purely technical violations

a. Wait and see

34

i. Rather than invalidating an interest at the time of its creation on the basis of

what might happen, we wait and see whether a contingent interest actually vests

w/i permissible vesting period

a. Gives interest a 2nd chance

b. Reforms to the conveyance

i. Anyone over 65 and below 13 is deemed incapable of having children

ii. A gift to the surviving spouse of a living person is presumed to be a gift to a

person in being

iii. Age contingencies in excess of 21 that cause a gift to fail are reduced to 21

yrs.

c. Uniform Statutory RAP

i. RAP or Alternative 90 yr. permissible vesting period

ii. Used in CA

IV – Leaseholds

A. Leasehold Estates

1. Types of leases:

a. Term of years:

i. Lasts for some fixed period of time or for a period computable by a formula

that results in fixing calendar dates for beginning and ending (ie: 1 day, 2 mths, 5

yrs.)

ii. Most states: no limit on number of yrs. permitted

iii. Can be terminable earlier upon the happening of some event or

condition

iv. No notice of termination is necessary

v. New document needed to renew

vi. Unilateral power to terminate can be engrafted

b. Periodic Tenancy:

i. Lasts for specific period of time that continues for succeeding periods until

LL/T gives notice of termination

ii. Automatically renewed unless one party gives notice

iii. Termination:

a. 6 mths notice is required to terminate year-to-year tenancy

b. For tenancies less than 1 yr, notice must be given equal to the length

of the period, not to exceed 6 mths

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c. Notice must terminate the tenancy of the final day of the period - NOT

in the middle

i. Some states: permit month-to-month tenancy to be terminated

at any time following 30 days notice

d. Unilateral power to terminate can be engrafted

iv. No new document needed to renew

c. Tenancy-at-will:

i. No fixed period

ii. Continues until one party extinguishes

iii. Ends when:

a. One of the parties terminates

b. One of the parties dies

iv. Notice usually required

v. Now disfavored

d. Tenancy-at-sufferance:

i. T remains in possession (holds over) after termination of the tenancy

ii. LL has 2 options:

a. Eviction (plus damages)

b. Creation of new tenancy

i. Created via consent (express or implied)

ii. Subj. to same conditions as previous tenancy

2. Creation of leases:

a. LL almost always owner in Fee Simple Absolute

b. LL grants T a present right of exclusive possession

c. If for over one year, SOF applies

3. Privity:

a. Privity of K: fancy way of referring to the relationship b/t parties to a K

b. Privity of Estate:

i. Relationship b/t parties to a conveyance of an estate in land

ii. Basic idea: when someone steps into an estate that someone else previously

had, the new possessor has assumed any covenants that “run w/ the land”

4. Cases:

a. Hannan v. Dusch (holdover T)

i. Delivery of possession

ii. English Rule v. American Rule:

a. English rule:

36

i. In every lease there is an implied covenant on the part of the

LL that the premises shall be open to entry by the T at the

beginning of the lease (ie: must give actual and legal

possession)

ii. Does not extend one day past the beginning of the lease (ie: to

later trespassers)

iii. Advantages:

a. More what you would expect

b. LL has more control

b. American rule:

i. LL not bound to put T into actual possession, only in legal

possession

ii. Advantages:

a. Efficiency concerns: might affect availability of

housing if LL was on hook (ie: might wait to rent out

until vacant)

b. Ernst v. Conditt (go-carts)

i. Assignment v. sublease:

a. Assignment = T transfers his entire interest for the remainder of his

term

i. Privity of estate is b/t LL and assignee

b. Sublease

i. T transfers anything less than her entire interest (even less 1

day)

ii. T retains a reversion in the event of default (ie: becomes

a LL)

a. This is the critical piece – whether T still has

possibility of possession

ii. Written instruments construed based on intention of parties

a. Actual words used (ie: “sublease” or “assignment”) are not

conclusive

c. Berg v. Wiley (restaurant lock-out)

i. LL may use self-help to retake premises w/o incurring liability for wrongful

conviction if:

a. LL is legally entitled to possession (ie: where T holds over after lease

term or where T breaches a lease containing a re-entry clause)

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b. LL’s means of re-entry are peaceable

i. Here, not peaceable b/c there was a RISK is could become not

peaceable

d. Sommer v. Kriedel & Riverview Realty v. Perosio (marriage called-off)

i. LL has a duty to make a reasonable effort to mitigate damages where he

seeks to recover rents due from a defaulting tenant

ii. “Reasonable efforts”:

a. Offered/showed apt. to prospective T’s

b. Advertised in local newspapers

c. T may rebut via evid. that he proffered suitable T’s who were rejected

iii. T must bear cost of any reasonable expenses incurred by a LL in attempting

to re-let

B. Tenant’s Rights and Remedies

1. Historically:

a. Payment of rent and LL promise to repair things were indep. of each other

b. Rationale:

i. Caveat Leasee (leasee beware)

ii. Old leasee’s were better w/ their hands

2. Modern Rights:

a. Quiet enjoyment / Constructive eviction (Reste Realty Corp. v. Cooper – basement

flooding)

i. Reste court (broad):

a. Any act or omission

b. Of the LL of anyone who acts under authority or legal right from the

LL, or of someone having superior title to that of the LL

c. Which renders the premises substantially unsuitable for the purpose

for which they were leased

OR

d. Which seriously interferes with the beneficial enjoyment of the

premises

e. Is a breach of the covenant of quiet enjoyment and constitutes a

constructive eviction of the T

ii. Typical view (narrow): LL liable only if

a. LL positively interfered w/ T’s access

OR

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b. Substantially deprived T of something essential and included w/i the

terms of the lease

c. Sometimes included:

i. Disclose latent defects

ii. Make promised repairs

iii. Abate nuisances in common areas

iii. General rule: T waives his right to claim a constructive eviction if he does not

vacate the premises w/i a reasonable time after the right comes into existence

a. Must be sympathetic to T and take into account the burden of vacating

put on him

iv. Limits of constructive eviction:

a. Generally can’t withhold rent unless premises are virtually unusable

b. Most doctrine requires T to abandon

i. Only then is remedy of protection from LL coming after T for

future rent withheld valid

ii. Many courts allow suit for damages too

c. Very important for commercial T’s who don’t have IWH

i. Don’t see residential T’s relying on this b/c they have IWH

which is broader

v. Partial eviction:

a. Actual eviction: Even though from part of the premises only, T is

relieved of all liability for rent

i. Restatement: Rejects this rule.

a. T may received abatement in the rent, but may not

withhold all the rent

b. Constructive eviction: T is not relieved of the oblig. to pay rent when

only a part, but not all of the premises, are made uninhabitable by the LL

b. Illegal lease:

i. Unsafe and unsanitary conditions can be a defense to a suit to evict for

nonpayment

ii. Code violation must exist at the time lease is entered into

a. Very limited protection

iii. Makes lease unenforceable

iv. Becomes a tenancy at sufferance

a. They do not have to leave (unlike constructive eviction)

c. Implied Warranty of Habitability (Hilder v. St. Peter):

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i. Premises must be “safe, clean and fit for human habitation”

a. Legally inhabitable, not in-fact inhabitable (ie: just b/c people are

living there does not mean it is not inhabitable legally)

ii. Covers latent and patent defects in essential facilities

iii. No waiver or assumption of risk

iv. Evidence of breach?

a. Substantial code violations

b. Notice and reasonable time to correct

v. Remedies:

a. Rental reimbursement

b. Damages

i. Approaches for calculation:

a. Diff. b/t value of dwelling as warranted and the value

of the premises as exists in its defective condition

(Hilder)

b. Diff. b/t agreed rent and FMV

c. Percentage reduction in value due to LL breach

ii. Punitives

c. Withholding future rent

d. Deduct expense of repair if LL fails to do in reasonable time

e. T can also abandon, just like in constructive eviction

i. But also gets to sue for damages during time there

d. Fair Housing Act: Exemptions for the “little guy” (ie: renting private dwelling)

e. Civil Rights Act: No exemptions for private dwellings

i. Applies to racial categories only

V – Private Agreements (Servitudes and Sales)

1. Servitudes

a. Non-possessory interest in another’s property

a. Land use arrangements arising out of private agreements

b. Usually involve 2 or more parcels of land

c. Purpose is to increase he total value of all the parcels involved

d. Burdens and benefits are often reciprocal

b. Interests commonly called “servitudes”:

a. Right to enter (easement)40

b. Right to enter and remove something attached to the land (profit)

c. Right to enforce restriction (negative easement, real covenant, or equitable

servitude depending on circumstances and remedy sought)

d. Right to require party to perform an act (real covenant or equitable servitude)

e. Right to require party to pay money for the upkeep of specified facilities (real

covenant or equitable servitude)

c. Primary forms:

i. Easements

ii. Real Covenants

iii. Equitable Servitudes

A. Easements

a. Easement v. license:

i. Easement: Irrevocable right to use or control some aspect of another’s property

a. If the land is sold to someone else, the easement goes w/ the land

b. An owner cannot have an easement in his own land

ii. License: revocable permission to do something that would otherwise be a trespass (ie:

plumber fixing drain, purchaser of a theater ticket, etc.)

b. Affirmative v. negative:

i. Affirmative: allowing someone to make use of someone’s land (ie: placing clothes on

a line, nailing fruit tree to neighbor’s wall, walking across someone’s land)

ii. Negative: preventing using someone’s land as would normally be allowed

c. Dominant v. servient tenement:

i. Dominant:

ii. Servient:

d. In Gross v. appurtenant

i. In gross:

a. B/t land and a person (ie: right to walk across land)

b. Gives right to some person

c. Requires only a servient estate (b/c does not benefit any land)

d. May be alienable or inalienable

e. Sometimes said to be “personal” in that they do not attach to any parcel of land

owned by the easement owner

ii. Appurtenant:

a. Land to land; b/t lands (ie: running sewer line across land)

b. Gives that right to whomever owns a parcel of land that the easement benefits

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c. Require both a dominant tenement (ie: estate) and a servient tenement

d. Attaches to and benefits dominant tenement

e. Usually transferable

i. BUT, can be made personal to the easement owner only and not

transferable

f. Main type we will deal w/

e. Classified by how created:

i. Express:

a. In writing, comply w/ SOF

ii. Exceptions to the writing requirement:

a. Estoppel (Holbrook v. Taylor – roadway through the woods):

i. License is irrevocable if

a. It includes right to build on or improve land

AND

b. Licensee exercises such a privilege at considerable expense

ii. Is irrevocable for as long a time as the nature of the license calls for

iii. If the circumstances change enough, the easement by estoppel could

be eliminated

b. Prescriptive (Holbrook):

i. Cousin of adverse possession

ii. Created when:

a. Open

b. Peaceable

c. Continuous

d. Under claim of right adverse to the owner of the soil

AND

e. W/ owner’s knowledge and acquiescence for over 15 yrs.

iii. Majority rule: Does NOT have to be exclusive (ie: can be sharing it

w/ the owner), as long as you are acting adversely

a. In TX (minority rule): Must be exclusive (ie: if owner is

using it too, then it is not prescriptive easement)

iv. Use by express or implied permission or license, no matter how long

continued, cannot ripen into an easement by prescription (Othen)

c. Implied:

i. Arise only when one piece of land is divided into 2 or more plots

ii. Inference about the intention of the parties

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iii. 2 types:

a. Prior use (Van Sandt v. Royster)

i. Elements:

a. Apparent and continuous use of portion of

tract when divided

b. Reasonably necessary to use and enjoyment

ii. Quasi-easement:

a. Use of one part of owner’s land for the benefit

of another part

b. If the owner conveys the quasi-dominant

tenement an easement is considered vested in the

grantee of the land as long as it is

i. Apparent

a. Doesn’t have to be visible

b. Suff. if apparent upon

reasonable inspection

ii. Continuous

AND

iii. Necessary

c. Quasi actual when prop. are divided

iii. Reservation v. grant

a. Grant: Owner giving easement to another

i. Some: more lenient if granting than

reserving

b. Reservation: Owner keeping for herself an

easement

b. Necessity (Othen v. Rosier – muddy lane)

i. Strict necessity required for the enjoyment of the

land

ii. Must have been necessity at time of parcel

division

iii. Mere fact that claimant’s land is completely

surrounded by land of another does not, in itself, give the

former a way of necessity over the land

iv. If dominant and servient tenements come into the same ownership,

the easement is extinguished altogether

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a. Will not be revived by a severance

b. When redivided: New implied easement can arise if the

circumstances at that time indicate a new easement was intended

v. Factors for finding an implied easement:

a. Whether claimant is conveyor or conveyee

b. Terms of conveyance

c. Consideration given

d. Whether claim is made against a simultaneous coneyee

e. Extent of necessity of easement

f. Presence of reciprocal benefits

g. Manner of land use prior to conveyance

h. Whether the prior use was or might have been known to the

parties

e. Scope of Easements

a. General rule: Depends on intent of parties, reasonableness of burden

i. Express: look at lang. and situation when created

ii. Generally allows for normal development of dominant parcel (except in

prescriptive)

b. Brown v. Voss ()

i. Easements extend only to servient tenement

ii. Black letter rule: Injunction to stop use for other parcels

c. Termination:

i. Release: Normally requires a writing (ie: SOF)

ii. Expiration:

a. End of time period set in original grant

OR

b. Defeasible easement (ie: terminating event happens)

iii. Merger

iv. Estoppel

v. Abandonment: Usually require more than non-use, except in some states w/

easements by prescription not used for statutory period

vi. Condemnation

vii. Prescription

d. Negative easements:

i. England:

a. Blocking windows

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b. Interfering w/ air flowing to land via a defined channel

c. Removing building support

d. Interfering w/ flow of an artificial stream

ii. U.S.: Mostly follows English model, but occasionally allows additional ones

(ie: view, solar)

e. Conservation easements:

i. Perpetual, transferable, in gross

ii. Tax deductions given

iii. Uniform Conservation Easement Act

iv. Takes a stick out of the bundle

B. Covenants

1. “Running”

a. Traditional requirements for “running”:

i. Benefit or burden?

a. Courts more lenient w/ running of benefit

ii. Remedy?

a. Equitable servitude = injunction

i. “In equity”

ii. Courts more lenient here (less worried about what they have

to prove)

b. Real covenant = damages

i. “At law”

iii. Other considerations?

a. Intent of orig. parties

b. Notice

i. Sanborn had broad notion of notice

ii. Nothing in the deed – had to figure out from common

scheme

c. Touch and concern (Neponsit)

i. Has to deal w/ the land itself

ii. Stretched touch and concern to extend to services and allowed

fees to satisfy (ie: homeowner’s assoc.)

a. Related to ownership of land in a meaningful way

iii. Previously: agreement to pay money was thought of as only a

private agreement

d. Vertical privity45

e. Horizontal privity

b. Approaches:

i. Burden side:

a. At law (RC): intent, notice, touch and concern, strict vertical privity,

horizontal privity

i. Strict VP = convey entire prop. (not just partial)

b. At equity (ES): intent (can infer from common scheme), notice

(common scheme), touch and concern

ii. Benefit side:

a. At law (RC): intent, touch and concern, minimal vertical privity

b. At equity (ES): intent (can infer from common scheme), touch and

concern, minimal vertical privity (minority jurisdictions – Neponsit)

2. Creation:

a. RC require a writing

b. ES can be in writing or inferred from a common scheme

3. Termination:

a. Merger: Unity of ownership of benefit and burden by same person (like easements)

b. Release: Normally written and recorded

c. Acquiescence: P has failed to enforce servitude against other breaches and then seeks

to enforce the servitude against D

d. Abandonment:

i. Similar to acquiescence

ii. Makes servitude unenforceable as to the entire parcel rather than only as to P

immediately involved

e. Unclean hands: Court will refuse to enjoin a violation of a servitude that P himself

previously violated

i. Equitable doctrine

f. Laches:

i. Involves unreasonable delay by P to enforce servitude against D, causing

prejudice to D

ii. Equitable doctrine

iii. Bars enforcement only

iv. Does not extinguish servitude

g. Estoppel: D has relied upon P’s conduct making it inequitable to allow P to enforce

servitude

h. Changed conditions:

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i. Unique to covenants

ii. Changed circumstances do not get rid of easements

a. Exception: easement by strict necessity

iii. Western Land Co. v. Truskolaski (shopping mall in residential area)

a. Restrictive covenants are enforceable as long as:

i. Character of neighborhood has not been adversely

affected

AND

ii. Purpose of the restrictions has not been thwarted

a. EX: Covenants are still of real and substantial value

to those seeking enforcement

b. Community may abandon covenant, thereby eliminating it

i. Violations by community must be so general as to frustrate the

orig. purpose of the agreement

iv. Rick v. West (hospital in residential area)

a. Restrictive covenants will not be enforced if:

i. Oppressive

ii. Unconscionable

v. Restate. §710:

a. Wants to treat all servitudes (ie: easements and covenants) the same

and is a proposal on how to do it

b. Radical approach

c. Looks at servient owner only – not the impact on other party

4. Common Interest Communities:

a. Distinctive feature: Oblig. that binds the owners of individ. lots or units to contrib. to

the support of common prop. or other facilities or to support the activities of an assoc.,

whether or not the owner uses the common prop. or facilities, or agrees to join the assoc.

i. CIC has the power to raise funds

ii. May enforce restrictions via fines or a lien on the individ. prop.

(Neponsit)

b. Any requirement of horizontal or vertical privity is met b/v the orig. purchasers are all

in privity w/ the developer and subsequent purchasers are in privity w/ the orig.

purchasers

c. Any touch and concern covenant usually satisfied

d. Nahrstedt v. Lakeside Village Condo. Assoc. (Boo Boo the cat)

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a. Legislature: restrictions contained in a project’s recorded declaration are

enforceable, unless unreasonable

i. Strong presumption of validity

b. Unreasonable:

i. Arbitrary (ie: bearing no rational relationship to the protection,

preservation, operation or purpose of the affected land)

ii. Violation of public policy

iii. Violation of fundamental constitutional right

iv. Imposition of burden on the use of affected land far outweighs any

benefit

c. Restatement: Determining reasonableness requires balancing the utility of the

purpose served by the restraint against the harm that is likely to flow from its

enforcement

C. Real Estate Transactions

1. Buying and Selling

a. K of sale:

i. Creates an executory period (ie: “in escrow”): title is not transferred

immediately upon signing the agreement, b/c both buyers and seller must do

certain things during the time b/t the K and closing

a. For disclosures, financing, inspections

i. What defects are “material”?

ii. Should disclosure be waivable?

b. Down-payment/earnest money required

c. If escrow fails, then sales K is rescinded

b. Equitable conversion:

i. “Equity regards as done what ought to be done”

a. Buyer is viewed as owner from date of K

b. Seller holds legal title as trustee for buyer

ii. Risk of loss:

a. Most: risk on purchaser, even though seller retains possession

i. Majority rule

b. Some: risk on seller until legal title is conveyed

iii. Can affect inheritance

a. If seller dies, it could be real prop. still, or personal prop. (ie:

money) depending on when title is converted

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c. Fiduciary duty of brokers (Licari v. Blackwelder - brokers)

i. Required to exercise fidelity and good faith and cannot put himself in a

position antagonistic to his principal interest

a. Fraudulent conduct

b. Acting adversely to his client’s interests

c. Failing to communicate info which is or may be material to his

principal’s advantage

ii. Subagent w/ express permission of another broker who has the listing, is

under the same duty as the primary broker to act in the utmost good faith

iii. Legal oblig. to make full, fair, and prompt disclosure all material facts w/i

his knowledge

a. Failure to do so =

i. Liability for whatever loss P may suffer as a consequence

AND

ii. Precludes recovery of a commission of D’s services

2. Marketable Title

a. Marketable title:

i. Implied cond. of K of sale

a. If seller cannot convey it, buyer is entitled to rescind K

ii. “A title not subj. to such reasonable doubt as would create a just

apprehension of its validity the mind of a reasonable, prudent, and intelligent

person, on which such person guided by competent legal advice, would be willing

to take and for which they would be willing to pay fair value.”

iii. Easements and covenants most often = no marketable title

b. Lohmeyer v. Bower (covenants/zoning restriction)

i. Private covenants:

a. Unmarketable if party holding title is exposed to litigations

i. Defect must be

a. Substantial

AND

b. One from which he may suffer injury

ii. Immaterial defects which do not diminish in quantity, quality

or value the prop. are not suff.

b. 4 options for covenants:

i. Regular K, complied-w/ covenant rescission

a. = encumbrance

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ii. Regular K, violated covenant rescission

a. = encumbrance

iii. “Subj. to” K, violated covenant rescission

a. = encumbrance

iv. “Subj. to” K, complied w/ covenant NO rescission

a. No encumbrance

ii. Ordinances (ie: zoning)

a. Municipal restrictions existing at the time of K are NOT

encumbrances or burdens on title that may allow rescission

i. Violated covenant rescission

ii. Complied w/ covenant NO rescission

b. Does NOT matter whether K just says “marketable” or “subj.

to”

3. Disclosure of Defects

a. Stambovsky v. Ackley (poltergeist)

i. Caveat emptor (gen. rule): mere nondisclosure not actionable

a. Exceptions:

i. Fiduciary relationship

ii. Confidential relationship

iii. Active concealment

ii. New rule: Where a cond. which has been

a. Created by the seller

b. Materially impairs the value of the K

AND

c. Is peculiarly w/i the knowledge of the seller

OR

d. Unlikely to be discovered

i. By a prudent purchaser

ii. Exercising due care w/ respect to the subj. transaction

e. Nondisclosure = basis for rescission as a matter of equity

b. Johnson v. Davis (leaky roof)

i. Old rule:

a. Where the parties are dealing at arm’s length

AND

b. the facts lie equally open to both parties

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c. w/ equal opportunity of examination

d. mere nondisclosure does not constitute a fraudulent concealment

i. Distinguishes misfeasance v. nonfeasance (ie: action and

inaction)

ii. New rule:

a. Where the seller of a home

b. Knows of facts materially affecting the value of the prop.

c. Which are not readily observable

AND

d. Are not known to the buyer

THEN

e. Seller is under a duty to disclose them to the buyer 4. Types of Recording Acts/Chain of Title

a. Indexes: jurisdictions vary on how far back you are required to go

i. Tract:

ii. Grantor-grantee:

a. All instruments indexed alphabetically and chronologically under the

grantor’s surname

i. Use to search forward

b. Grantee index: sorted under grantee’s surname

i. Use to search backward

c. Need to check both grantee and grantor index

i. Check for mortgages, etc.

ii. May be unexplained breaks in the chain of title which needs to

be worked out

b. Orr v. Byers (“Elliot”)

i. Idem sonans: when a person’s name has been inaccurately written, the identity

of such person will be presumed from the similarity of sounds b/t the correct

pronunciation and the pronunciation as written

a. Ie: absolute accuracy in spelling names is not required in legal

proceedings and if the pronunciations are practically alike, the rule is

applicable

b. Exception: does NOT apply where the written name is material

i. Material = a variance must be such as has misled the opposite

party to his prejudice

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c. Depending on the jurisdiction, person may be required to look under

multiple spellings

c. Types of recording acts:

i. Race statute

a. Person who wins the race to record prevails

b. Whether subsequent purchaser has actual knowledge of the prior

purchaser’s claim is irrelevant

c. Limits inquiry into matters off the record

d. Transfer of title is more efficient

e Protects sub. purchaser only if the sub. purchaser records first

ii. Notice statute

a. If a subsequent purchaser had notice of a prior unrecorded

instrument, the purchaser could not prevail over the prior grantee

b. Protects sub. purchaser against prior unrecorded instruments

though the sub. purchaser fails to record

c. Less efficient than race statute

iii. Race-notice statute

a. Sub. purchaser is protected against unrecorded instruments only if the

sub. purchaser

i. Is w/o notice of the prior instrument

AND

ii. Records before the prior instrument is recorded

b. Punishes non-recording, and provides motivation to record, making

the pub. records complete

d. Chain of Title:

i. Recorded sequence of transactions by which title has passed from a sovereign

to the present claimant.

ii. Technical meaning: period of time for which records must be searched

and the documents that must be examined within that time period

e. Inquiry notice

i. 3 kinds of notice:

a. Actual: personally aware of a conflicting interest in real prop.

b. Record (constructive): notice based on properly recorded

instruments

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c. Inquiry (constructive): based on facts that would cause a reasonable

person to make inquiry into the possible existence of an interest in real

prop.

ii. Harper v. Paradise (lost deed)

a. People must ascertain through diligent inquiry the contents of

the earlier deed and the interests conveyed therein

b. A deed in the chain of title, discovered by the investigator, is

constructive notice of all other deeds which were referred to in the deed

discovered,” including an unrecorded plat

c. Prescription does not begin to run against remainderman until life

estate is over

iii. Waldorff v. Eglin National Bank (occupied condo)

a. Successors to legal title take it burdened w/ the equitable interests of

which they have either actual or constructive notice

b. Actual possession is constructive notice to all the world, or anyone

having knowledge of said possession of whatever right the occupants

have in the land

i. When open, visible, and exclusive

5. Deeds

a. Types of deeds:

i. General warranty

a. Most common

b. Warrants title against all defects in title

c. Irrelevant whether they arose before or after grantor took title

ii. Special warranty

a. Warrants only against the grantor’s own acts

b. Does NOT warrant against the acts of others

iii. Quitclaim deed

a. No warranties

b. Simply conveys whatever title grantor has, if any (Brown)

b. Multiple conveyances:

i. First in time to receive deed prevails

a. Owner cannot convey what he does not have

b. EX

i. O to A (no record)

ii. Later, O to B

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iii. As b/t A and B, A wins b/c A was first to receive deed

c. Covenants of title (Brown v. Lober – mineral rights)

a. Present (ie: broken at time deed is delivered):

i. Seisen: grantor is the owner of the estate described in the deed

ii. Covenant of right to convey: warrants that the grantor has the legal

right to convey title

iii. Covenant against encumbrances: warrants that there are no

encumbrances on the land

b. Future (ie: promise that the grantor will do some future act, such as defending

or compensating future loss):

i. Covenant of warranty: grantor’s promise to defend the title

against other (lawful) claimants, compensate for loss by superior

title

ii. Covenant of quiet enjoyment: warrants that the grantee’s possession

will not be disturbed by anyone with superior title

iii. Covenant of further assurances: promises that the grantor will take

other actions that are reasonably necessary to perfect the grantee’s title

6. Title Insurance

a. Has no fixed term and continues for as long as the insured maintains an interest in the

prop.

b. Does not run w/ the land to subsequent purchases

c. Opinion of the insurer is backed by an agreement to make that opinion good if it should

prove to be mistaken

d. Rogge v. Chelsea (acre mistake)

i. Anyone who buys real estate w/o the aid of a surveyor runs the risk that he may

not receive all the land for which he paid (ie: title insurance is no sub. for a

survey)

ii. Title company’s liability is limited to the policy and the company is not liable

in tort for negligence in searching records

a. Exception: company agrees to conduct a search and provide the

insured w/ an abstract of title in addition to the title policy, then it may

expose itself to liability for neg.

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